IDEAS home Printed from https://ideas.repec.org/p/ags/eaa123/122480.html
   My bibliography  Save this paper

EU and World Agricultural Markets: Are They more Integrated after the Fischler Reform?

Author

Listed:
  • Mela, Giulio
  • Canali, Gabriele

Abstract

This work uses cointegration techniques allowing for structural breaks to assess the extent to which the Fischler reform of the CAP increases price transmission elasticity (PTE) between the world and European corn, wheat, and soybean markets. Results show that the reform increased PTE in the case of corn and wheat, while its impact was negligible for soybeans. However, the long-term relationship (cointegration) between world and European prices can be detected only taking into account – other than the Fischler reform’s structural break – also the fact that world commodity markets were interested, in 2003-04 and 2007-08, by price bubbles. In particular the latter affected the world – European corn price relationship in the ascending phase, while the wheat and soybeans markets in the descending phase.

Suggested Citation

  • Mela, Giulio & Canali, Gabriele, 2012. "EU and World Agricultural Markets: Are They more Integrated after the Fischler Reform?," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122480, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa123:122480
    DOI: 10.22004/ag.econ.122480
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/122480/files/MELA_2.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.122480?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Robert Engle & Clive Granger, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    2. Radetzki, Marian, 2006. "The anatomy of three commodity booms," Resources Policy, Elsevier, vol. 31(1), pages 56-64, March.
    3. Clemente, Jesus & Montanes, Antonio & Reyes, Marcelo, 1998. "Testing for a unit root in variables with a double change in the mean," Economics Letters, Elsevier, vol. 59(2), pages 175-182, May.
    4. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, Decembrie.
    5. Krivonos, Ekaterina, 2004. "The impact of coffee market reforms on producer prices and price transmission," Policy Research Working Paper Series 3358, The World Bank.
    6. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    7. Perron, Pierre & Vogelsang, Timothy J, 1992. "Testing for a Unit Root in a Time Series with a Changing Mean: Corrections and Extensions," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(4), pages 467-470, October.
    8. John Baffes & Bruce Gardner, 2003. "The transmission of world commodity prices to domestic markets under policy reforms in developing countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(3), pages 159-180.
    9. Pierre Perron, 2005. "Dealing with Structural Breaks," Boston University - Department of Economics - Working Papers Series WP2005-017, Boston University - Department of Economics.
    10. James G. MacKinnon, 2010. "Critical Values For Cointegration Tests," Working Paper 1227, Economics Department, Queen's University.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Feng, Siyi J. & Patton, Myles, 2013. "Evolvement of Market Integration between EU and World Agricultural Markets," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158862, Agricultural Economics Society.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johannes W. Fedderke, 2022. "Identifying supply and demand shocks in the South African Economy, 1960–2020," South African Journal of Economics, Economic Society of South Africa, vol. 90(3), pages 349-389, September.
    2. Muhammad Shahbaz & Muhammad shahbaz Shabbir & Muhammad sabihuddin Butt, 2016. "Does Military Spending Explode External Debt in Pakistan?," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(5), pages 718-741, September.
    3. Roberto Martínez-Espiñeira, 2007. "An Estimation of Residential Water Demand Using Co-Integration and Error Correction Techniques," Journal of Applied Economics, Taylor & Francis Journals, vol. 10(1), pages 161-184, May.
    4. Carraro, Alessandro & Stefani, Gianluca, 2011. "Price Transmission in Three Italian Food Chains: A Structural Break Approach," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114317, European Association of Agricultural Economists.
    5. Shahbaz, Muhammad, 2012. "Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2325-2339.
    6. Chiu, Fan-Ping & Hsu, Chia-Sheng & Ho, Alan & Chen, Chi-Chung, 2016. "Modeling the price relationships between crude oil, energy crops and biofuels," Energy, Elsevier, vol. 109(C), pages 845-857.
    7. Luis F. Martins & Paulo M. M. Rodrigues, 2022. "Correction to: Tests for segmented cointegration: an application to US governments budgets," Empirical Economics, Springer, vol. 63(2), pages 601-601, August.
    8. Roberto Martínez-Espiñeira, 2007. "An estimation of residential water demand using co-integration and error correction tec hniques," Journal of Applied Economics, Universidad del CEMA, vol. 10, pages 161-184, May.
    9. Shahbaz, Muhammad & Kumar, Ronald Ravinesh & Ivanov, Stanislav & Loganathan, Nanthakumar, 2015. "Nexus between Tourism demand and output per capita with relative importance of trade and financial development: A study of Malaysia," MPRA Paper 67226, University Library of Munich, Germany, revised 11 Oct 2015.
    10. Joseph P. Byrne & Roger Perman, 2006. "Unit Roots and Structural Breaks: A Survey of the Literature," Working Papers 2006_10, Business School - Economics, University of Glasgow.
    11. Luz A. Flórez & Karen L. Pulido-Mahecha & Mario A. Ramos-Veloza, 2018. "Okun´s law in Colombia: a non-linear cointegration," Borradores de Economia 1039, Banco de la Republica de Colombia.
    12. Giulia Mascagni, 2014. "Aid and Taxation: Evidence from Ethiopia," Working Paper Series 7314, Department of Economics, University of Sussex Business School.
    13. Magazzino, Cosimo, 2012. "Wagner versus Keynes: Public spending and national income in Italy," Journal of Policy Modeling, Elsevier, vol. 34(6), pages 890-905.
    14. Muhammad Shahbaz & Ronald Ravinesh Kumar & Stanislav Ivanov & Nanthakumar Loganathan, 2017. "The nexus between tourism demand and output per capita with the relative importance of trade openness and financial development," Tourism Economics, , vol. 23(1), pages 168-186, February.
    15. Apergis, Nicholas & Bowden, Nicholas & Payne, James E., 2015. "Downstream integration of natural gas prices across U.S. states: Evidence from deregulation regime shifts," Energy Economics, Elsevier, vol. 49(C), pages 82-92.
    16. Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers wp09-10, School of Economics, University of Wollongong, NSW, Australia.
    17. Abdullahi Alim & Peter R. Hartley & Yihui Lan, 2018. "Asian Spot Prices for LNG and other Energy Commodities," The Energy Journal, , vol. 39(1), pages 123-142, January.
    18. Shahbaz, Muhammad, 2013. "Linkages between inflation, economic growth and terrorism in Pakistan," Economic Modelling, Elsevier, vol. 32(C), pages 496-506.
    19. Mesbah Fathy SHARAF, 2017. "Energy consumption and economic growth in Egypt: A disaggregated causality analysis with structural breaks," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 46, pages 59-76.
    20. Astorga, Pablo, 2012. "Mean reversion in long-horizon real exchange rates: Evidence from Latin America," Journal of International Money and Finance, Elsevier, vol. 31(6), pages 1529-1550.

    More about this item

    Keywords

    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaa123:122480. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.